- WEF suspended its Global Competitiveness Index for 2020, due to the health crisis and socio-economic fallout brought on by the pandemic.
- Countries with advanced digital economies, robust social safety nets and previous experience in handling epidemics could manage the Covid-19 pandemic well, research from WEF shows.
- South Africa ranks highly in terms of progressive taxation systems to drive economic transformation in future.
Countries with advanced digital economies and digital skills, coupled with robust social safety nets and previous experience in dealing with epidemics have been better positioned to manage the impact of Covid-19, research by the World Economic Forum (WEF) has found.
WEF on Wednesday released The Global Competitiveness Report Special Edition 2020: How Countries are Performing on the Road to Recovery. The report unpacks conditions for recovery and revival for countries and considers characteristics which allowed certain countries to manage the pandemic well.
The WEF suspended its Global Competitiveness Index ranking for 2020, due to the health crisis and socio-economic fallout across countries, brought on by the pandemic.
This year's report, adapted for the pandemic, shows that countries with advanced digital economies and digital skills enabled economies to continue running, as people worked from home. These countries which did well in this regard are Netherlands, New Zealand, Switzerland, Estonia and the US.
The WEF report also points out that countries which successfully planned and integrated their health, fiscal and social policies were relatively successful in "mitigating the effects of the crisis". They include Singapore, Switzerland, Luxembourg, Austria and the United Arab Emirates.
It shows that countries which had previous experience with coronavirus epidemics such as SARS had "better protocols and technological systems" in place to manage the pandemic. These countries include the Republic of Korea and Singapore. They could contain the epidemic "relatively better" than others.
Countries like Denmark, Finland, Norway, Austria, Luxembourg and Switzerland with strong social safety nets, were able to support residents who were unable to work. "Countries with strong financial systems such as Finland, the United States, the United Arab Emirates and Singapore, could more easily provide credit to SMEs (Small and Medium Enterprises) to prevent insolvency," the report read.
In South Africa, government introduced top-ups to existing grants, as well as special Covid-19 social relief grant amounting to R350. The Unemployment Insurance Fund also provided a Temporary Employer/Employee Relief Scheme, providing benefits to employees unable to work during the lockdown. President Cyril Ramaphosa has said these benefits will have to come to an end as government has limited resources, Fin24 previously reported.
National Treasury in partnership with the SA Reserve Bank and commercial banks also implemented a R200 billion loan guarantee scheme to support distressed businesses. The uptake of the loan scheme, however, has been subdued and unions have criticised it for its stringent requirements.
"During this time of profound uncertainty, the health crisis and economic downturn have forced a fundamental rethink of growth and its relationship to outcomes for people and planet.
"Policy-makers have a remarkable opportunity to seize this moment and shape new economic systems that are highly productive while growing shared prosperity and environmental sustainability," said Saadia Zahidi, managing director of WEF.
Charting a way forward, the report indicates which countries are best prepared for future economic transformation. "While no country is fully prepared for recovery and economic transformation, some are better placed than others," the report read.
Countries which rank highly in terms of preparedness for digital infrastructure investments - to accompany a transition to a greener and more inclusive economy - are Denmark, Estonia, Finland and the Netherlands.
Countries which are best prepared for greening their economies - by upgrading their energy infrastructure, transport networks and committed to multilateral agreements on environmental protection - include Denmark, Estonia, Finland and the Netherlands. Those who are less prepared are Russia, Indonesia, Turkey and South Africa.
Countries like Finland, Sweden, New Zealand and Austria are better prepared to implement longer term investments with the goal of strengthening stability and expand inclusion. The US, however, is least ready, among advanced economies, the report read.
South Africa, the Republic of Korea, Japan and Australia are best prepared for progressive taxation to drive economic transformation. They have "relatively well-balanced and progressive tax structures".
Countries which are ready to expand public services - future-ready education, labour laws and income support to expand social protection - include Germany, Denmark, Switzerland and the United Kingdom; which can combine their labour protection with new safety net models. "South Africa, India, Greece and Turkey are less prepared," the report read.
Finland, Japan, the US, Republic of Korea, and Sweden are identified as best prepared for creating "markets of tomorrow" such as investments in research, innovation and invention. Greece, Mexico, Turkey and the Slovak Republic are considered less well prepared.